26 USC § 845 - Certain reinsurance agreements

---
identifier: "/us/usc/t26/s845"
source: "usc"
legal_status: "official_prima_facie"
title: "26 USC § 845 - Certain reinsurance agreements"
title_number: 26
title_name: "INTERNAL REVENUE CODE"
section_number: "845"
section_name: "Certain reinsurance agreements"
chapter_number: 1
chapter_name: "NORMAL TAXES AND SURTAXES"
subchapter_number: "L"
subchapter_name: "Insurance Companies"
part_number: "III"
part_name: "PROVISIONS OF GENERAL APPLICATION"
positive_law: false
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Added Pub. L. 98–369, div. A, title II, § 212(a), July 18, 1984, 98 Stat. 757; amended Pub. L. 108–357, title VIII, § 803(a), Oct. 22, 2004, 118 Stat. 1569.)"
---


# § 845. Certain reinsurance agreements

**(a)** **Allocation in case of reinsurance agreement involving tax avoidance or evasion** In the case of 2 or more related persons (within the meaning of section 482) who are parties to a reinsurance agreement (or where one of the parties to a reinsurance agreement is, with respect to any contract covered by the agreement, in effect an agent of another party to such agreement or a conduit between related persons), the Secretary may—

if he determines that such allocation, recharacterization, or adjustment is necessary to reflect the proper amount, source, or character of the taxable income (or any item described in paragraph (1) relating to such taxable income) of each such person.

**(1)** allocate between or among such persons income (whether investment income, premium, or otherwise), deductions, assets, reserves, credits, and other items related to such agreement,

**(2)** recharacterize any such items, or

**(3)** make any other adjustment,

**(b)** **Reinsurance contract having significant tax avoidance effect** If the Secretary determines that any reinsurance contract has a significant tax avoidance effect on any party to such contract, the Secretary may make proper adjustments with respect to such party to eliminate such tax avoidance effect (including treating such contract with respect to such party as terminated on December 31 of each year and reinstated on January 1 of the next year).

---

**Source Credit**: (Added Pub. L. 98–369, div. A, title II, § 212(a), July 18, 1984, 98 Stat. 757; amended Pub. L. 108–357, title VIII, § 803(a), Oct. 22, 2004, 118 Stat. 1569.)

## Editorial Notes

### Amendments

2004—Subsec. (a).  substituted “amount, source, or character” for “source and character” in concluding provisions.

## Statutory Notes and Related Subsidiaries

### Effective Date of 2004 Amendment

> “The amendments made by this section [amending this section] shall apply to any risk reinsured after the date of the enactment of this Act [
> 
> ].”

, , , provided that:

### Effective Date

> **“(1)** Subsection (a) of section 845 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this title) shall apply with respect to any risk reinsured on or after September 27, 1983.
> 
> **“(2)** Subsection (b) of section 845 of such Code (as so added) shall apply with respect to risks reinsured after December 31, 1984.”

, , , as amended by , , , provided that: